The Idaho Supreme Court on Thursday heard arguments in an appeal that could alter the ability of urban renewal agencies to take on debt for public projects without voter approval.

The case, heard in Twin Falls, involves Rexburg's Urban Renewal Agency and Kenneth Hart, a resident of the eastern Idaho city. The crux of Hart's case questions if Rexburg's URA can issue up to $6.3 million in bonds to finance a public swimming pool and recreation center without the same public vote and approval that the Idaho Constitution requires for cities.

Other urban renewal agencies throughout Idaho are watching the case. Nine urban renewal agencies in the state, including those in Twin Falls and Jerome, have filed a brief asking the higher court to uphold the district court decision in Rexburg that rejected Hart's arguments.

Urban renewal agencies are created by cities and receive funding from tax revenue generated by increased property values in their target area.

John Runft, the attorney for Hart, argued that the bonds would create a liability for the city of Rexburg, and as a result, requires a public vote with two-thirds approval to pass.

"I'm representing people that are crying out for their right," he said.

The Urban Renewal Agency, though, is a separate entity from the city, said Ryan Armbruster, attorney for Rexburg's URA.

"For the URA to issue bonds at this point in time, no further action of the city is needed," Armbruster said.

He stressed that the city has no financial liability in the bonds.

"There's no liability on the part of the city to simply follow the law as the law is written," Armbruster said.

Justice Roger Burdick asked Runft if the issue should be fixed by the Legislature instead of any judge.

Runft said that urban renewal agencies financing projects without voter approval amounts to a "circumvention" of the state constitution's provision for voter approval of debt.

"All of these things together have created a whole gradual shift which results in a circumvention,"he said.

In an interview, Melinda Anderson, Twin Falls economic development director, said there is a separation between cities and urban renewal agencies.

"It's been very clear to us that while the cities are the ones allowed to create the URAs, the agencies are independent of the city itself," Anderson said.

Anderson said she's unsure of what the case's outcome might mean for the Twin Falls URA.

"I do know that it's been difficult for some URAs around the state to be able to bond because the banks were unclear about what was going to be the outcome of the lawsuit," Anderson said.

Ben Botkin may be reached at bbotkin@magicvalley.com or 208-735-3238.